In more recent news surrounding shady business practices in the gaming industry that doesn’t involve EA, major retail outlet, GameStop, has announced the closure of 3% of their international retail stores following poor sales in the holiday season of 2016. While 3% statistically doesn’t seem like much, GameStop has launched over 7000 retail stores globally, which brings its percentage total to an estimated 200 stores that face closure. This has sprung up a heated debate in the gaming community regarding the significance of gaming retailers and physical products versus the increasing growth of digital. What could this ultimately mean for the future of gaming retail?
GameStop is no stranger to controversy lately, it seems. From the opened display copies of games debacle, which resulted in the company coming under fire for intentionally removing content from the video game Deus Ex: Human Revolution on PC, to the “Circle of Life” policy that forced its employees to lie to customers in order to meet extremely demanding quotas, GameStop certainly built up a reputation that almost vilified their image to some consumers. In the holiday season of 2016, which is the gaming industry’s most lucrative sales time of the year, sales charts revealed a massive downward spiral in sales at GameStop.
There are a few reasons behind the decrease in sales. With shipping sites like Amazon constantly pushing weekly and monthly sales on new games, established retailers found it increasingly difficult to compete with online pricing. Seeing as how Amazon isn’t a physical retailer, the site could afford to discount prices with phenomenal rates. Even if its gaming department wasn’t measuring up to great sales, it didn’t jeopardize the company as they could easily fall back on its wide variety of other departments. This is unfortunately not the case for gaming retailers. As video games, consoles and everything in-between being their only means of turning profit, companies like GameStop have to maintain strict guidelines to meet their sales targets every month or risk the ability to support themselves.
So it’s no surprise to see consumers swinging more towards the way of digital downloads and online purchasing. After all, the prices are cheaper and it’s practically more convenient for people to buy online and have either instant gratification by downloading or immediate door-to-door delivery. This cancels out the act of having to even leave the house and take a trip to the nearest (or ideally the cheapest) retailer. The argument could only be validated with GameStop’s primary department of income; used games. For the most part, the used games market is marginally doing better than the new market as retailers can afford to significantly mark down the prices of used games. In some cases, they might even be cheaper than online prices, which prompts consumers to go out and buy the used game instead.
This has been gaming retailers’ ace in the hole, not just for GameStop but for many other retail outlets around the world. Used games ultimately mean that whatever money is made off the marked up price is essentially clean profit – something that is not possible, or should I rather say, not profitable enough with new games as they have to account for inflation and a set cost price. For GameStop in particular, the used games market is their biggest source of income, and irrespective of the very dissatisfactory prices offered for trade-ins, GameStop could easily triple that price for resale and still find consumers who would view it as a fair value, as long as it isn’t marked up to the retail selling price of new games. But what does this mean going forward for the future of GameStop and gaming retail everywhere? Is digital gaming retail about to sweep the physical market in the same way digital overshadowed the film/Blu-Ray and DVD industry?
As it currently stands, I don’t see it happening for at least another few console generations. Despite the massive push into a new digital age by the likes of Microsoft’s Xbox Game Pass and Sony’s PlayStation Now, I believe there’s still issues left unresolved that prevents this from ever becoming a prominent thing. For example, where the digital market could flourish for the film industry due to piracy overshadowing Blu-Ray and DVD sales, piracy is simply not possible in large part for games – although this is more evident in console games than PC games as the latter’s security measures could easily be bypassed. Due to the countermeasures taken to prevent piracy, the illegal games market has since died out with Sony’s innovative push into Blu-Ray discs during the PlayStation 3’s launch, and the constant monitoring of their systems to ensure hacking or jailbreaking doesn’t occur.
We also have to account for internet availability. This certainly isn’t as much of a problem now as it was over a decade ago, but several countries in the world still find internet a commodity or luxury as opposed to a necessity, still falling slightly behind other first-world countries like the United States that push the internet under basic living utilities. In these cases, retailers like GameStop can still keep a healthy flow of business due to whichever restrictions each country has in regards to internet access. Physical copies of games are still a lot more desirable for collectors or those opposed to the idea of digital, as both do equally weigh their pro’s and con’s.
On one hand, physical copies bear physical quality which is reflected in the feeling you get while playing a game, to a certain extent. In the same way many people claim that watching movies via a physical Blu-Ray disc is more rewarding than simply streaming the film, the same can be said about gaming, although it isn’t a vital point to make. Physical copies also break the very glaring issue of digital gaming; game sharing. Digital gaming may be trying to counter this by introducing digital game sharing, but have yet to present the same compelling argument physical game sharing presents. The act of simply completing a game and lending it to a friend is a much smoother transition in physical form, and this of course has been a major aspect of the spread of video games since its inception. In defense of digital, the perks are also great. Instant purchasing and not having to worry about stock availability aside, digital also means it isn’t prone to damage like physical games (unless your console or PC goes belly up).
The debate will never end as long as gaming retail outlets have a spot and purpose within the industry, but in light of GameStop’s closing of several retail stores, this has posed an even bigger concern regarding the future of gaming as a whole. We aren’t quite ready to make the complete leap into a full digital era yet, but we aren’t entirely supportive of retail stores either, so it’s safe to say that the future of gaming is neither looking bright nor bleak. It’s just waddling somewhere in the middle until we can allow ourselves to catch up.